Correlation Between Transatlantic Mining and Blue Moon
Can any of the company-specific risk be diversified away by investing in both Transatlantic Mining and Blue Moon at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Transatlantic Mining and Blue Moon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transatlantic Mining Corp and Blue Moon Zinc, you can compare the effects of market volatilities on Transatlantic Mining and Blue Moon and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Transatlantic Mining with a short position of Blue Moon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transatlantic Mining and Blue Moon.
Diversification Opportunities for Transatlantic Mining and Blue Moon
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Transatlantic and Blue is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Transatlantic Mining Corp and Blue Moon Zinc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Moon Zinc and Transatlantic Mining is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Transatlantic Mining Corp are associated (or correlated) with Blue Moon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Moon Zinc has no effect on the direction of Transatlantic Mining i.e., Transatlantic Mining and Blue Moon go up and down completely randomly.
Pair Corralation between Transatlantic Mining and Blue Moon
Assuming the 90 days horizon Transatlantic Mining is expected to generate 1.43 times less return on investment than Blue Moon. But when comparing it to its historical volatility, Transatlantic Mining Corp is 1.09 times less risky than Blue Moon. It trades about 0.05 of its potential returns per unit of risk. Blue Moon Zinc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Blue Moon Zinc on October 28, 2024 and sell it today you would earn a total of 16.00 from holding Blue Moon Zinc or generate 80.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transatlantic Mining Corp vs. Blue Moon Zinc
Performance |
| Timeline |
| Transatlantic Mining Corp |
| Blue Moon Zinc |
Transatlantic Mining and Blue Moon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transatlantic Mining and Blue Moon
The main advantage of trading using opposite Transatlantic Mining and Blue Moon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transatlantic Mining position performs unexpectedly, Blue Moon can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Blue Moon will offset losses from the drop in Blue Moon's long position.| Transatlantic Mining vs. XXIX Metal Corp | Transatlantic Mining vs. Maple Peak Investments | Transatlantic Mining vs. Partners Value Investments | Transatlantic Mining vs. T2 Metals Corp |
| Blue Moon vs. Transatlantic Mining Corp | Blue Moon vs. Opus One Resources | Blue Moon vs. Grosvenor Resource Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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